60 Minutes, BOQ and STORM

Now there is an interesting twist to the tale if its true.

Finally some validation that high volume brokers have known for a loong while.

Deals that brokers cant get through credit often get through at branch because the branchies "fudge" the figures...................

One named case where the borrrower had 7 figure existing exposure to another lender, that exposure disapeared on the loan app, thus the loan was approved.

Yet, 60 minutes claims, the lender is still chasing the borrowers for full repayment ...................even though their "staffer" ( prob franschisee?) comitted fraud to have the deal done in the first place

Bring on some decent regulation, and quickly !

ta
rof
 
Now there is an interesting twist to the tale if its true.

Finally some validation that high volume brokers have known for a loong while.

Deals that brokers cant get through credit often get through at branch because the branches "fudge" the figures...................

One named case where the borrower had 7 figure existing exposure to another lender, that exposure disappeared on the loan app, thus the loan was approved.

Yet, 60 minutes claims, the lender is still chasing the borrowers for full repayment ...................even though their "staffer" ( prob franchisee?) committed fraud to have the deal done in the first place

Bring on some decent regulation, and quickly !

ta
rof

storm staff had their own office in Townsville 'which bank' and could approve and print off their own documents. Pretty good chance of the loan being approved in those circumstances!

As for the BOQ situation yes staff member did wrong thing but should it be so easy for the borrower assuming of sound mind to just walk away, they applied and took the money knowing loan size and repayments, surely they also have to be responsible for their own actions?
 
Hi BT

To a large extent I agree with you.

On another front, the new NCCP rules suggest that the loan would not only be forgiven, but that the lender would be in imajor strife if it aproved such a loan against the benefit of the borrower.

ta
rolf
 
Bring on some decent regulation, and quickly !


rof

yes i agree but i don't think the NCCP is it.

My opinion is it is written by people who don't understand lending to solve a problem that does not exist.

The people they are trying to help will probably just get scammed in some other way because they are beyond help, in the process hundreds of thousands of people who should have access to finance will be denied by this ridiculous legislation.

The vast majority of loan arrears in this country is caused by divorce or unemployment, this legislation will have no impact on that whatsoever but will create a bunch of ambulance chasing lawyers to sue lenders and brokers at the first sign of trouble.

Cheers

BT
 
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I am so over the broker wearing this, it's a pathetic excuse which seems to work in the public arena, let's get real ...... those who are chasing the money should be responsible, this really gets up my nose.
 
I am so over the broker wearing this, it's a pathetic excuse which seems to work in the public arena, let's get real ...... those who are chasing the money should be responsible, this really gets up my nose.

i agree completely, broker and lender have a duty of care but person requesting money must be accountable for their own actions
 
The vast majority of loan arrears in this country is caused by divorce or unemployment, this legislation will have no impact on that whatsoever but will create a bunch of ambulance chasing lawyers to sue lenders and brokers at the first sign of trouble.

Cheers

BT

I'm surprised that the MB association/group haven't had a form created by the legals which would absolve them of any responsibility to have to verify that the info they have received from the borrower is complete and accurate.

Throw the responsibility straight back on the client.
 
Hi Marc

Already in place for most brokers.

But, this cant protect you in isolation.

The issue isnt someoneone winning case against you. Its you trying to defend it that may tak you down.

The Storm case appears unusual in that the information the clients position was not correctly put forward by the lender to their credit area. Thus the mobile lender is being accused of fraud, and therefore the borrower should not have had the money to lose in the fist place.

While we will never know the true story, nor what really went on, but that reason of never should have had the money seems to be the primary basis for CBA rolling over. For CBA to forego anything, they must believe they will lose any court or EDR action BIG time. My personal experience is they would rather burn 10 x the money, have bad PR and stick their head in the sand.

With the NCCP coming into place the,some of the questions u will need to incorporate into your fact find will be interesting.

The one redeeming feature of the NCCP is the N bit. Currently, I believe the issues the NCCP is looking to cover, are already covered, albeit poorly in various state based legislations.

ta
rolf


ta
rolf
 
I'm surprised that the MB association/group haven't had a form created by the legals which would absolve them of any responsibility to have to verify that the info they have received from the borrower is complete and accurate.

Throw the responsibility straight back on the client.

Accountants often ask clients to sign a stat dec....Why not MBs?
 
I am so over the broker wearing this, it's a pathetic excuse which seems to work in the public arena, let's get real ...... those who are chasing the money should be responsible, this really gets up my nose.
Whilst I agree that borrower should be responsible, it's hard for the borrower to know if figures have been 'adjusted' without their knowledge (and I would imagine this takes place after borrower has seen the last of the paperwork), just to get the loan through.

I believe that there are many out there who don't have a 'full' understanding of finance matters and accept what an entrusted broker/advisor etc tell them.

Regards
Marty
 
Hi Marty

And therein lies the issue much of the time.

Its already a form of fraud and misrepresenation for such things to go on. New legislation likley wont stop it, but may be tighter licencing with some spot audits may slow it

With lo doc lending getting tougher and tougher, I believe there will be more non disclosure of thus type by lenders reps, brokers but also by borrowers.

ta
rolf
 
The employee of the bank is an AGENT for the bank, therefor anything he does wrong, the bank is liable, whether he commits fraud or not. That is why Management practices are changing fast and those who do not understand vicarious liability should look at it hard. The first thing anyone should do when they are wronged by an employee is nominate the CEO of the business in their suit and only that person. The person at the top is repsonsbile for all good and bad work done by employess under any limited liability corporation and it is the same for the government.

So imagine you lost 2 million in some investment deal and you nominate the CEO only. Well it will be up to him to fight the matter and then let him decide whether he wishes to nominate other people or the corporation as third parties to try and offset his liability.

There is no way that if you have some chance of being succesful will the CEO fight the matter. He will direct his underlings to take a different course of action.

Not an easy thing to do, but when we wish to employ people then that is the risk we take. Now naturally enough when the times are good many a 'client' are more than happy for the agent/broker to fudge the figures, it is just that when things go bad then somebody has to pay, at least in the mind of the investor. Creates problems when both parties are willing to be a little or lot dodgy and twhen it is good neither party cares, but when the ***** hits the fan then somebody is looking to recover.

Anyway, bad luck for the majority in storm as they had a laymans understanding of what was going on but in the good times it is all good.

I grew up knowing the storm CEO as my mum worked for him, and he was always a 'smooth talker' thinking big et.

Now in hindisight he did not know enough about markets to ensure that when risk got to far outside the envelope then he should hedge. Greed mists the eyes and not to mention fame. Imagine the Ego stroking he received with people telling him he was the best thing since sliced bread, well when the bread went mouldy views changed.
 
I might be off topic a bit so apologies.

Banks will often pay funds out rather than go to court, or have to deal with the Banking Ombudsmen. (as in the case with CBA)

The fee's that the banking ombudsmen charges the banks can get expensive; like $20k is not out of the question.

While at the bank we never looked into any matter for less then $50, just gave the money back, it was not worth the time and human effort to do so.

I remember some of the write off were in the $000,000.

And just for a bit of trivia I remember a credit card with a limit of $2,000 being overdrawn to the turn of $160k, and yes the client was not happy!
 
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